Unfair pay

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Some places in America are trying a new approach to close the gender pay gap

As countries around the world grapple with the gender pay gap, some places in America have come up with a new way to tackle the problem.

Their solution? Bar employers from asking job applicants what they currently earn, so new salary offers are not based on the previous figure.

Laws are already on the books in a handful of jurisdictions, including California, Massachusetts, New York City and Puerto Rico. Similar measures are under consideration in more than 20 other states, as well as at the national level.

The aim is to stop a hiring practice that critics say perpetuates the pay gap, since women often start out with lower salaries.

“What these bans are doing is ensuring that employers pay employees for the job they have to do,” says Kate Nielson, state policy manager for the American Association for University Women, which supports the new laws.

“There is a real attraction to this kind of policy because it is proactive.”

Why now?

The US has officially banned unequal pay for equal work since 1963, but what counts as equal can be controversial, as highlighted by recent rows in the UK at the BBC and Tesco.

And unlike the UK – which now requires large companies to report publicly on pay by gender – the Trump administration recently suspended a rule that would compel firms to report similar data to the government.

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The idea has spread rapidly amid mounting frustration in the US over the pay gap

People who campaigned for the law in Massachusetts – which became the first place in the US to approve such a rule in 2016 – said they think the idea has caught on because it is simple and does not punish firms retroactively.

“Instead of taking the traditional approach… we wanted to actually create new standards to make sure that employers and businesses were being proactive,” says Sasha Goodfriend, president of the Massachusetts chapter of the National Organization for Women.

“It sometimes needs to be redefined in a new way to reignite an age-old conversation.”

In some cases, she says firms also use salaries to screen candidates, interpreting high pay as a proxy for competence and responsibility.

“They think it’s an objective number when it’s anything but,” says Ms Donovan, who pushed to include the ban on prior pay queries in the Massachusetts law.

“The dirty little secret in hiring, is for the most part we pay people what they’re willing to accept.”

Firms’ responses

In liberal Massachusetts, advocates worked carefully to get business support for the proposal.

Firms elsewhere were sometimes more resistant, worried the measure would induce higher research and costs during hiring.

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Hiring experts say they see little sign that pay negotiations are becoming less important

In Philadelphia, the local Chamber of Commerce even sued on behalf of employers that included Comcast, charging that the measure violated free speech grounds, a case that is still being litigated.

As the idea gains traction, however, companies are starting to adjust, says David Woolf, a Philadelphia-based partner at the law firm Drinker Biddle, who works on employment issues.

“I don’t mean to suggest they like it,” he says. “It’s just the reality now.”

Possible drawbacks

Ms Donovan and other supporters said they are hopeful the rule is a step toward companies setting salaries based on the job, not the person, noting research that has found women tend to negotiate less and are less successful when they do.

But hiring experts say they see little sign that pay negotiations are becoming less important.

Companies are asking candidates how much they want to get paid as a “fallback” says Mr Woolf.

And if anything, the new rules are likely to prompt pay discussions to start earlier in the hiring process, says Paul McDonald, senior executive director at the staffing firm Robert Half.